Spotlight

Indian markets are expected to open with a cautious undertone as investors await the Reserve Bank of India's monetary policy decision, with the outcome assuming greater significance amid heightened geopolitical uncertainty and elevated energy prices. Market participants will closely scrutinise not only the policy decision itself but also the RBI's assessment of inflation, liquidity conditions, currency stability and growth prospects. Particular attention is likely to be paid to the central bank's commentary on the recent surge in crude oil prices, the sharp depreciation in the rupee and the potential inflationary impact of disruptions to global energy supply chains.

The policy decision comes at a time when geopolitical tensions remain elevated across the Middle East. The ongoing U.S.–Iran conflict, coupled with continued hostilities involving Israel and Hezbollah, has disrupted key shipping routes and kept the Strait of Hormuz effectively closed, contributing to higher energy prices and increased volatility across global financial markets. The resulting pressure on India's import bill, foreign fund flows and the rupee has heightened concerns over the inflation outlook, making the RBI's policy guidance particularly important for investors seeking clarity on the domestic macroeconomic trajectory.  

Crude oil prices are currently trading in the $92–93 per barrel range, having stabilized after recent volatility. While lower than recent highs, current levels remain elevated and continue to pose challenges for inflation and import-related costs.
 
Asian markets are trading sharply lower, reflecting a cautious global risk sentiment after the recent AI-led rally lost momentum. Japan's Nikkei 225 fell by over 1.5%, while South Korea's KOSPI declined nearly 6%. The weakness across Asian markets is likely to influence sentiment in emerging markets, including India. 
 
Foreign Institutional Investors (FIIs) have remained net sellers in recent sessions, and sustained foreign outflows continue to act as a key headwind for domestic equities. Domestic Institutional Investors (DIIs), however, continue to provide important support through consistent buying activity, helping absorb a portion of the selling pressure.
 
Overall, market sentiment remains cautious. While the moderation in crude oil prices offers some relief, unresolved geopolitical tensions, continued FII selling, and weak global cues are keeping investors guarded. The RBI policy outcome and its accompanying commentary will be the key near-term catalyst, with any dovish signals likely to support sentiment, while a more hawkish stance could weigh on market performance.

Technical view

Nifty 50

Nifty 50 continues to trade with a cautious undertone as the index remains below key resistance levels despite recent recovery attempts. Technically, the 23,450–23,550 zone continues to act as a key immediate resistance area. A sustained breakout above this range would be required to improve sentiment and could pave the way for a recovery toward the 23,750–23,800 levels.
 
On the downside, the 23,250–23,150 region remains a critical support zone. Holding above this range will be essential to maintain the current recovery structure. However, a decisive break below 23,150 could intensify selling pressure and expose the index to further downside toward the 23,000 mark. Overall, the near-term technical structure remains cautious and range-bound. A decisive move above the immediate resistance zone will be necessary to establish stronger bullish momentum and improve the broader market outlook.

Bank Nifty

Bank Nifty continues to trade with a cautious to mildly positive bias, supported by resilience in select heavyweight banking stocks. Technically, the 54,400–54,500 zone remains an important immediate resistance area. A sustained breakout above this region could strengthen bullish momentum and pave the way for an advance toward the 54,800–55,000 range, which continues to act as the next significant resistance band.
 
On the downside, immediate support is placed at 54,000–53,800. Holding above this zone will be essential to preserve the ongoing recovery structure. However, a decisive break below this support band could trigger fresh profit booking and drag the index toward the 53,200–53,000 region, which remains a major support area in the near term. Overall, the near-term technical structure remains cautiously positive. Bank Nifty is expected to maintain its recovery bias as long as it sustains above the 54,000 support zone.